SPIN AND DELAY: How EnergyAustralia is undermining climate action in Victoria

Right now the state government is deciding Victoria’s emissions reduction targets for 2025 and 2030.[1] It’s the most important decision they’ll make on climate change this term of government, but they’re facing resistance from some powerful vested interests. So it’s time to shine a spotlight on the tactics and strategy of one of the worst offenders, EnergyAustralia.

With a final decision due next March, Victoria’s emissions reduction targets will determine how fast we cut pollution and influence a whole range of other government decisions.

We need to take action that meets the scale and urgency of the climate crisis, and strong targets are crucial.[2]

However EnergyAustralia is up to their old tricks, fuelling fear through the media and trying to blame the Victorian government for the inevitable closure of Yallourn[3] which, at more than 45 years old, is Australia’s most polluting and most unreliable coal-burning power station.

It’s disappointing, but not surprising. As the owners of Yallourn, EnergyAustralia is Australia’s second largest climate polluter, and the power they sell is some of the dirtiest in Australia.[4]

EnergyAustralia sells the most polluting power out of Australia's 'big three' retailers, due mostly to Yallourn.

That’s why, from helping to kill Australia’s carbon price to undermining Australia’s Renewable Energy Target (RET), EnergyAustralia has spent the best part of a decade delaying and weakening policies to cut pollution (see EnergyAustralia’s dirty track record here).

In that time the climate crisis has only grown more urgent, and the impacts more severe.

EnergyAustralia’s strategy = spin and delay

EnergyAustralia likes to pretend they’re taking the middle ground by publicly supporting a transition to clean energy. But they only refer to this transition occurring at some undefined point in the distant future.[5]

This is EnergyAustralia’s desperate attempt to skirt around the issue of the required speed and scale of action, as determined by the science. It’s just a different version of climate denial called ‘predatory delay’.

In 2018, the UN Intergovernmental Panel on Climate Change (IPCC) warned we have less than 12 years to make rapid changes if we want to limit global temperature rises within a manageable (but still dangerous) range. This involves rapidly phasing out coal-burning power, which numerous studies show needs to happen by 2030.

The reality is EnergyAustralia’s position is anything but reasonable. They have spent years deliberately slowing down climate action so they can profit from business as usual. And they still want to operate Yallourn, Australia’s most polluting and unreliable coal power station, for another 13 years.

That would make Yallourn almost 60 years old! There is simply no level of realistic climate action that fits with this outrageous plan.

We commissioned leading energy analysts Reputex to model how Victoria could replace Yallourn power station by 2023. Click here to find out more.

The predictable greenwashing

EnergyAustralia’s usual response to these criticisms is to spruik their investments in clean energy.

Clean energy investment is great. But EnergyAustralia still makes most of its money burning coal and plans to do this for as long as possible, regardless of the damage this causes to our climate and health. Slick PR and green pamphlets aren’t going to change that.

What we really need is for EnergyAustralia to have a business model that is consistent with the objectives of the Paris climate agreement, and doesn’t rely on destabilising our earth’s climate.

And that means a plan for Yallourn’s closure well before 2032 and probably before 2025. It also means they need to stop trying to blame government policy for Yallourn’s closure. Because even if we weren’t facing a climate emergency, their 2032 date is utter fantasy.

Why is Yallourn’s closure before 2032 all but inevitable?

Yallourn is 45 years old, so another 13 years (2032) would make it 58 years old! Power stations were never designed to operate for that long.

This is the kind of technology being advertised as cutting edge when Yallourn was built.

The failure of old coal burners (especially in the heat when their cooling systems can’t cope) is also a major and growing risk to power supply.[6]And at 45 years old, Yallourn is already the most unreliable coal power station in Australia with 33 outages in 18 months.[7] Even according to the people that show up to work there every day, coal-burning power stations like Yallourn are “on life-support” & “clearly not going to be operating much longer”.

What’s more, the 2032 date wasn’t ever based on the ability of the power station to operate that long. It was picked because it’s when they’d run out of easily mined coal.

And it seems EnergyAustralia isn’t fooling anyone. When asked, a clear majority of people in the Latrobe Valley think Yallourn will close before 2032.

So why is EnergyAustralia still pretending Yallourn will operate for 13 more years?

If you’re a large, foreign-owned, energy corporation motivated by profits then this strategy makes sense. By persisting with a completely unrealistic 2032 closure date for Yallourn EnergyAustralia can:

1) Exert pressure on the Victorian government to implement weak targets that would allow them to squeeze a few more years of profit out of Yallourn and/or

2) Try to blame government policy when they announce Yallourn’s closure before 2032 and lobby for a massive taxpayer funded cheque as compensation (just like they did with the Gillard government, pocketing a $257,498,933 taxpayer handout under the carbon price package).

EnergyAustralia’s dirty track record

Their strategy to block action and delay climate policies that might effectively put the brakes on coal pollution has worked terrifyingly well in the past.

1.

Fought against carbon pricing

Public comments, advertising, and lobbying from EnergyAustralia (then called TRUenergy) helped fuel the divisive fear campaign that killed Australia’s carbon price. This set the stage for years of partisan politics, policy chaos and rising carbon pollution.

Carbon pricing has since become widespread across the world, and Australia remains the only country to have ever repealed the policy.

2.

LOBBIED TO CUT AUSTRALIA’S RENEWABLE ENERGY TARGET (RET)

Australia’s national Renewable Energy Target enjoys broad public support. It has been effective in encouraging large-scale wind and solar projects across Australia. It has also helped millions of Australians install solar on their rooftops.

However, in 2014 the Abbott Government launched an attack on the RET – ultimately leading to a reduction in the target. Studies (including from Tony Abbott’s own hand-picked expert) had shown that reducing the target would lead to higher costs for consumers in the long term (and more pollution).

The beneficiaries of cutting the RET were the power companies that own coal and gas burning power stations. By reducing competition from new renewable energy projects, companies like EnergyAustralia stood to make much larger profits from selling their dirty electricity.

EnergyAustralia was the company that stood to gain the most additional profit from cutting the RET.[8] So it’s no surprise they are on the record pushing for a reduction in the large-scale renewables target and a ‘cap and phase out’ of the small-scale target.[9]

3.

EnergyAustralia has not installed new technology that could reduce Yallourn's toxic pollution.

An expert review found that “other than electrostatic precipitators for removal of particulates, the Yallourn station does not have any of the modern controls one would expect to find at a coal-fired power station.“[10]

This also a failure of the regulations. But should a company really wait to be forced to protect people’s health?

5.

ENERGYAUSTRALIA HAVE ONLY SUPPORTED A NATIONAL CLIMATE POLICY THAT WOULD HAVE SLOWED INVESTMENT IN CLEAN ENERGY (THE NATIONAL ENERGY GUARANTEE WITH LOW TARGETS).

EnergyAustralia did support the now canned National Energy Guarantee (NEG).[11] However it was likely that the NEG’s incredibly weak targets would have actually reduced investment in clean energy.

As the opening line of this 2017 article in The Conversation states, “The federal government’s new National Energy Guarantee (NEG) proposal looks likely to put the brakes on renewable energy investment in Australia.”

6.

PAID NO CORPORATE TAX IN AUSTRALIA FROM 2014 TO 2016, DESPITE BRINGING IN $23.9 BILLION IN REVENUE.

This kind of corporate tax dodging means less resources for governments to do important things like support new industries and jobs in the Latrobe Valley (not to mention hospitals and schools). EnergyAustralia did resume paying corporate tax in October 2017, but only after this was publicly exposed.[12]

What about the workers and community?

In any discussion about phasing out coal power we need to think about the impact on the local community.

Polling shows a clear majority (62%) of people living in Moe/Newborough, the closest town to the power station, support Yallourn closing by 2025 if workers are supported, and new industries are brought to the Latrobe Valley. [13]

However, this smooth transition can only be planned for if energy companies are upfront about when the power station will really close, accept the reality of the climate emergency and stop playing politics.

We’ve seen what happens when a large energy corporation tells fairytales about the closure date of an old coal power station.

Hazelwood’s owner ENGIE repeatedly said Hazelwood would operate into the 2030s (sounds familiar). And just days before announcing Hazelwood would close in 2017, Engie managers were still recruiting workers with the promise that they would be operating until at least 2025.

This kind of behaviour creates uncertainty for workers and local communities, and makes the transition to clean energy much more difficult.

That’s why we think EnergyAustralia should come clean and announce a closure date that is realistic and consistent with limiting warming to 1.5 degrees. That way, the Latrobe Valley community can get the support they need and put plans in place now.

A fast and fair transition to clean energy is possible

Between Victoria’s Renewable Energy Target and the Solar homes program there is already a lot of momentum behind clean energy. Victoria is on track to easily beat our clean energy target 40 percent by 2025.

But more needs to happen, so we commissioned leading energy analysts Reputex to model how Victoria could replace the output of Yallourn power station by 2023.

Notes

Victoria’s Climate Change Act 2017 legislates for the state to reach zero greenhouse gas emissions by 2050, and to make sure we reach that the state government will set five-yearly intermediate targets. Targets for 2025 and 2030 must be decided by March 2020.

Speed matters. Low targets now mean we need to make more rapid and disruptive cuts later. Low targets also mean more total emissions, almost certainly putting the goal of limiting warming to 1.5 degrees out of reach.

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